Ruthigen said today it will merge with Pulmatrix, creating a combined drug developer that will focus on commercializing the latter’s inhaled therapeutic products.
Pulmatrix would become a wholly-owned subsidiary of Ruthigen—which would take the Pulmatrix name and carry on Pulmatrix’s work of advancing a new generation of inhaled therapeutics.
Pulmatrix is advancing a pipeline of products that include PUR0200, a Phase II-ready once-daily inhaled bronchodilator for chronic obstructive pulmonary disease (COPD) and PUR1900, an inhaled anti-infective for the treatment of cystic fibrosis (CF).
Both therapeutics are designed to be delivered through the company’s inhaled small particles easily respirable and emitted (iSPERSE) dry powder delivery platform. iSPERSE uses engineered aerodynamically small, dense particles to create powders that can be used with several dry powder inhaler technologies and can be formulated with virtually any drug substance.
“This transaction represents an excellent opportunity to advance our novel iSPERSE inhaled dry powder platform and lead CF candidate into clinical development and to meet our long-term growth objective of building a leading company around a robust pipeline for respiratory disease,” Pulmatrix president and CEO Robert Clarke, Ph.D., said in a statement.
Dr. Clarke will serve as president and CEO of the combined company, which will be headquartered in Lexington, MA, where Pulmatrix’ is based.
Added Ruthigen chairman and CEO Hojabr Alimi: “This merger has the potential to provide a significant business growth opportunity for our combined companies. We hope that the introduction of a new team of scientists and management with a proven track record, as well as Pulmatrix's new drug development programs, will catalyze significant growth opportunities in the near future.”
Until now, Ruthigen had been advancing lead drug candidate RUT58-60, which according to the company is the first shelf stable and tissue biocompatible form of hypochlorous acid capable of satisfying FDA’s safety and efficacy requirements as a drug for invasive use. RUT58-60 is a Phase I/II broad-spectrum anti-infective designed for the prevention and treatment of infection in surgical and other invasive applications, with an initial indication of use in abdominal surgery. The first patient was enrolled in a clinical trial of RUT58-60 in November 2014.
Last year, PUR0200 completed a Phase I study assessing its safety and tolerability, as well as the effect on lung function in COPD patients of different dosages of the treatment.
Pulmatrix’ pipeline also includes two other CF-indicated compounds—the antibiotic PUR0400, in a “nonclinical development” phase, and the anti-infective PUR2000, in the formulation feasibility phase—as well as PUR1500, a compound of undisclosed type also in formulation feasibility, and indicated for idiopathic pulmonary fibrosis.
Under the merger agreement, all of Pulmatrix's debt and equity securities outstanding will be exchanged for shares representing about 81% of Ruthigen’s outstanding common stock. Ruthigen went public in March 2014 at an initial public offering price of $7.25 per share, only to see its share price fall since then to $3.91 as the close of trading on Friday.
Existing institutional investors in Pulmatrix entered into stock purchase agreements with Pulmatrix to invest an additional $10 million in Pulmatrix upon the closing of the merger.
Pulmatrix’ largest shareholder is Polaris Partners, whose founding partner Terry McGuire is a senior Pulmatrix board member. Another lead investor in Pulmatrix is 5AM Ventures, one of whose managing partners, Scott Rocklage, is also a board member.
Last month Pulmatrix raised about $4.5 million, “in contemplation of entering into the merger agreement,” Ruthigen said.
The boards of both companies have approved the merger, which is subject to closing conditions that include approval of an initial listing of the merged entity's common stock on NASDAQ, approval of the merger by stockholders of Ruthigen and Pulmatrix, and other customary closing conditions. Shares of the combined company would trade on the NASDAQ Capital Market after the merger.